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DECREE No

DECREE No.56-CP OF OCTOBER 2, 1996 OF THE GOVERNMENT ON THE STATE PUBLIC-UTILITY ENTERPRISES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Law on State Enterprises of April 20, 1995;

At the proposals of the Minister of Planning and Investment and the Minister of Finance,

DECREES:

Article 1.- The State public-utility enterprises are independent State enterprises or independent cost-accounting members of the State corporations directly performing national defense and security tasks or producing goods or providing public services according to State policies, State plans or orders within the price levels, price brackets or charges set by the State, and operating not mainly for profit.

Article 2.- The State enterprises defined in Article 1 of this Decree shall include:

1. Enterprises engaged in the manufacture and/or repair of weapons, equipment, facilities for special use in the national defense and security and enterprises which are located in important strategic areas and combine economic activities with the performance of national defense tasks in their operations.

2. Enterprises producing other goods or providing other public services with at least 70% of their turnover generated from the activities in the following domains:

a) Urban communication and public-utility works;

b) Management, exploitation, renovation and maintenance of the infrastructure system: the national system of railways, land roads, waterways, airports, flight control, maritime insurance and navigation control, piloting and/or towing ships into or out of sea ports; technical test of land road and waterway communication means; supervision, control and distribution of radio frequencies.

c) Exploitation and protection of irrigation works;

d) Production of original breeds of plants and animals;

e) Publication and distribution of text books, political publications; production and distribution of newsreels, documentary films, films for children; production and supply of kitchen salt, projection of films in service of the population of highland and border areas and islands; production and the provision of other services under State social policies.

Article 3.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government shall base themselves on the criteria defined in Articles 1 and 2 of this Decree to decide which among the enterprises currently operating in their respective branches or localities are public-utility enterprises.

Article 4.- The heads of the agencies which identify the public-utility enterprises shall assign annual plans or hand production orders to them.

The public-utility enterprises have the responsibility to produce goods and/or provide public services according to plans or production orders of the State.

Article 5.-

1. The newly established public-utility enterprises shall be given priority in the allocation of enough initial State capital corresponding to the assigned public-utility tasks.

2. The supplementary allocation of capital to the enterprises currently in operation, corresponding to their public-utility tasks assigned by the State is defined as follows:

a) The public utility enterprises having profit shall be considered for profit tax reduction to supplement the capital of the enterprises in accordance with provisions of law.

b) A public-utility enterprise without source for self-accrument shall be allocated supplementary capital by the State.

Article 6.- In addition to the activities which are temporarily not subject to turnover tax as provided for in the Law on Turnover Tax and the Law on the Amendment and Supplement to a Number of Articles of the Law on Turnover Tax, other public-utility activities which cannot fully cover the cost of production or service supply shall be considered for turnover tax exemption or reduction.

Article 7.- The public-utility enterprises must sell their products or supply their services at the prices, within the price brackets or charges set by the State. They can use such revenues to make up for their expenses on the following principles:

1. If the revenue cannot fully cover the reasonable expenses, the State shall subsidize the difference and ensure the reasonable material interests for the laborers.

2. If the revenue is larger than the reasonable expenses, it shall be handled as follows:

a) If the revenue involves the cost of production or service, the earning after deduction of the reasonable expenses shall be the profit of the enterprise and shall be distributed in accordance with the current regulations;

b) If the revenue is collected according to the prices, price brackets or charges set by the State and does not involve production or service cost, the remainder after deduction of the managerial expenses, and other expenses according to current regulations and ensuring the reasonable material interests for the laborers shall be remitted to the State budget.

3. The Ministry of Finance shall provide detailed regulations on ensuring the reasonable material interests for the laborers who directly perform the tasks in service of national defense and security or produce goods or provide public services according to State policies.

Article 8.- The transfer, lease, mortgage and pledge of assets under the management of the public-utility enterprises must be decided by the heads of the agencies signing the decisions on the establishment of such enterprise upon receiving the written consent of the agency managing State capital and assets in the enterprise.

Article 9.- The public-utility enterprises wishing to invest outside the enterprise or mobilize capital in accordance with provisions of law shall have to draw up a specific plan and submit it to the agency managing State capital and assets in the enterprise for its comments before submitting such plan to the head of the agency which has signed the decision on the establishment of the enterprise, for decision.

Article 10.- The public-utility enterprises shall be entitled to conduct extra business activities in conformity with their capabilities and the demand of the market, on the following conditions:

1. Having a written consent from the direct managing agency;

2. Not affecting the performance of the public-utility tasks or production orders assigned by the State;

3. Making supplementary registration of business lines in accordance with current regulations;

4. Conducting separate cost accounting for its business activities;

5. Fulfilling the obligation of tax payment for the extra business in accordance with provisions of law.

Article 11.- The procedures and order for the establishment, reorganization and dissolution of State public-utility enterprises shall be carried out in accordance with the provisions of Decree 50-CP of August 28, 1996 of the Government on the establishment, reorganization, dissolution and bankruptcy of State enterprises. When a State public-utility enterprise is dissolved, the head of the agency signing the decision on the dissolution may request the establishment of a new public-utility enterprise or transfer of the public-utility tasks of the dissolved enterprise to another State enterprise.

Article 12.- The settlement of the bankruptcy of a State public-utility enterprise operating in a number of important fields shall be carried out in accordance with the provisions of Section III of Decree 189-CP of December 23, 1994 of the Government guiding the implementation of the Law on Bankruptcy at the enterprises directly servicing national defense and security and important public services.

Article 13.- Besides the specific provisions of the Law on State Enterprises and this Decree, the State public utility enterprises shall have to observe other provisions of the Law on State enterprises.

Article 14.- The State business enterprises, when conducting public-utility activities assigned by the competent State agency, the State business enterprises shall be entitled to the regimes of allowances, price subsidies or other State preferential regimes corresponding to the volume of public-utility products or services as stipulated in Point e, Clause 1, Article 8 of the Law on State Enterprises and other provisions of law.

Article 15.- This Decree takes effect from the date of its signing. The previous provisions which are contrary to this Decree are now annulled. The Ministry of Planning and Investment, the Ministry of Finance and other concerned State agencies shall have to guide the implementation of this Decree.

Article 16.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

The Prime Minister

VO VAN KIET